Friday, September 22, 2006

Suing the automakers: is California dreamin’?
California’s lawsuit against automakers for exhaust emissions from motor vehicles is generating worldwide headlines. Is this is just a bunch of noise? I don’t think so. Forget for a moment the strict legalities involved, though they are a source of legitimate worry for automakers. (Don’t go by the recent unsuccessful similar actions against major power generating companies, e.g. Connecticut v. American Electric Power. This case is under appeal, and could result in a landmark application of the doctrine of public nuisance.)


Instead, let’s focus for a moment on the PR aspect of this, because it’s the more immediate problem for the automakers. This is an electoral move, calculated to give California’s attorney general Lockyer some positive visibility in his quest for election as state treasurer in November. If his gambit is successful, auto emissions will be an election issue. It’s always a good populist move to attack big companies during an election. So the auto companies can expect some nastiness, which might reverberate past November.

How should they respond?

I have suggested in recent posts that hybrid vehicles—ones with powertrains that integrate a gasoline or diesel engine with an electric motor—are the wave of the future when it comes to reducing emissions from motor vehicles. We need to make hybrids more widespread. How? Encourage consumer uptake by making these vehicles less expensive. The province of Ontario already offers a $2,000 sales tax rebate to anyone who buys a hybrid. The government of Canada now needs to match this, with a GST rebate.

No doubt the Naomi Klein set in Canada would love to stick it to the automakers—which are all big foreign-owned multinationals. But a California-style move in this country would be stupid. Let’s be realistic and think this through. Ontario and Canada need the auto industry. The auto industry needs to develop hybrids. Let’s push for the GST rebate.

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